Isle of Man FIU Highlights Online Gambling Typologies for Financial Crime Risks

This publication is part of the FIU’s ongoing commitment to meeting international standards as outlined under FATF Recommendation 29. Its goal is to assist industry stakeholders in detecting and mitigating financial crime risks within the sector.

Online Gambling’s Role and Associated Risks

Online gambling has become a significant contributor to the Isle of Man's economy, accounting for around 14% of national income. The Isle of Man regulates online gambling under the Online Gambling Regulation Act 2001 (OGRA), which requires operators to adhere to anti-money laundering (AML) and counter-financing of terrorism (CFT) obligations, depending on their licensing model. These obligations range from full to sub-licences and software supplier roles.

The report details how criminals exploit the anonymity, speed, and cross-border nature of online gambling to launder illicit funds. Common techniques include "cash in, cash out" schemes, parallel betting, chip dumping in peer-to-peer (P2P) games, and the use of fake identities to withdraw funds via alternative methods. The FIU also highlights concerns over cryptocurrency laundering through gambling accounts, which is often tied to darknet activities and sanctioned states like North Korea.

Red Flags and Practical Guidance for Operators

The FIU’s report includes crucial red flag indicators, case examples, and risk factors designed to provide practical support to gambling operators, financial institutions, and service providers. The guide emphasizes the need for ongoing monitoring and enhanced due diligence, especially when dealing with clients or transactions from high-risk jurisdictions. By following the FIU’s recommendations, industry players can better combat the exploitation of online gambling platforms for financial crime.